Why Athletes Go Broke – Review of Broke, an ESPN Films Documentary

Broke 30 for 30 Logo
ESPN Films 30 for 30 – Broke

This past weekend I was hanging with some friends who like to talk sports and all they could talk about was the latest film in ESPN Films’ 30 for 30 series.

This particular film is called Broke, and it’s all about why a majority of professional athletes face financial troubles so quickly after retiring.

Last night I was able to watch the film, take some notes, and I’m presenting a review here for you guys.

About Broke

The 90 minute documentary film Broke is directed by Billy Corben, who also directed Cocaine Cowboys and another 30 for 30 film, The U (this particular film was where Corben got to know Bernie Kosar and shortly thereafter learned of Kosar’s financial troubles, which ultimately helped to inspire Broke).

The other motivation for the film: a 2009 Sport Illustrated article, How (and Why) Athletes Go Broke by Pablo S. Torre (who is in the film). The quote from the article that helped set the premise for this film:

“By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce. Within five years of retirement, an estimated 60% of former NBA players are broke.”

The film oddly seemed to call in question the validity of these numbers, but then didn’t ask Torre about them. Then the film went on to say that it didn’t matter about the validity of the numbers because of the anecdotal evidence pointing towards this being a “widespread” problem.

Film Style and the Honest Athletes

The film opens with a montage of several players discussing everything from the excitement of getting their first check to what they spent their millions on to how they ultimately ended up broke. This whole intro segment really capsulates the entire film.

This is what the film will be – switching quickly back and forth between former football, baseball, and basketball athletes lamenting about their story with money. I like the style of the film, but I thought 90 minutes of this was difficult to consume. I would have appreciated a deeper, slower dive into some areas.

The athletes featured in the film include,

  • Leon Searcy (NFL Offensive Lineman),
  • Andre Risen (NFL Wide Receiver),
  • Cliff Floyd (MLB Outfielder),
  • Keith McCants (NFL Linebacker),
  • Bart Scott (NFL Linebacker),
  • Jamal Mashburn (NBA Forward),
  • Curt Schilling (MLB Pitcher),
  • Homer Bush (MLB Second Baseman),
  • Sean Salisbury (NFL Quarterback),
  • Eugene Lockhart (NFL Linebacker),
  • and Bernie Kosar (NFL Quarterback), who I thought stole the show.

Note that not all of these player had financial problems, they were just the primary one’s sharing their story on film.

Okay, let’s talk about some of the substance of the film. Corben doesn’t spend 90 minutes trying to make excuses for broke players, but he does seem passionate about getting to the root causes of their financial troubles. I think you’ll be as surprised as I was at the many factors that make it so difficult for professional athletes to hold on to their wealth.

The film begins with news reports and stats at how quickly all the professional leagues have risen in value. In 2012 the average NFL, MLB, and NBA teams were worth $1.1 billion, $605 million, and $393 million, respectively. The leagues are all worth substantially more than they were 20 years ago, and this wealth has trickled down to the players in the form of huge salaries and big time signing bonuses.

Broke 30 for 30 Average Value of Professional Sports Franchises
The Average Value of Professional Sports Franchises – 1980-2012

The How and Why Behind Athletes Going Broke

The rest of the film is structured into segments that, when combined, make it easy to understand why so many players end up where they are.

All About the Benjamins – In this segment the players all discuss their first checks, huge bonuses, endorsement deals, and what they did with some of those initial paychecks. Many players bought their parents a house and car. Many talked about this being their “pay day” after devoting their childhood and collegiate years to one sport. Bart Scott, current NFL Linebacker with the New York Jets admitted to being clueless about money and taking his first check to a retail check-cashing service vs a bank.

Bling, Bling – The “bling” culture had a huge influence on many of the players. They talked about ‘making it rain’ with $100 bills in the strip club and ‘pimpin out their cribs’ like the popular MTV show. Several players said they would spend a mortgage payment or more every time they went out to the club.

Keeping Up with the Joneses – Just like we look across the street at what our neighbor is driving, pro athletes look across the locker room and see what other athletes are doing. The problem arises when the athlete you are looking at is the highest paid player on the team, by far! There is a huge difference in pay on the team and many players spend years trying to keep up with their higher paid team mates.

Mo Money, Mo Problems – Like Biggie Smalls said, Mo Money, Mo Problems. This segment referenced the many lawsuits that athletes face, the taxes they have to pay (they have to file state tax returns and pay taxes in each state that they play a game in. This segment also discusses the way athletes are paid, over the course of the regular season, leaving the off season without any regular paychecks. Further reading: learn how to budget on irregular income.

Hustlers Paradise – Success in one area in life can often lead to unreasonable beliefs that you can easily have success in any area in life (i.e. the Midas touch). Many of these players believed since they were hitting home runs on the field, they could hit ‘home runs’ in business. This segment talked about the many business deals that are offered to players from friend, family, and anyone who can get in front of them. To young players, these ideas are fun, sexy, and fulfill that need to be seen as a public success. A quote from the film that I appreciated was that “it’s not sexy to invest in a mutual fund.” According to one person in the film, only about 30% of all business ideas succeed. Many of these players were only investing in businesses.

Who Can You Trust? – This is one area where I start to feel sorry for some of these guys. When you’re in your early 20s and you’re handed a million dollar signing bonus, who do you turn to for financial advice on what to do with this money? Many players turn to their agents (good negotiators, but not necessarily good money managers) or their parents (who aren’t skilled enough to handle the money wisely). I loved Bernie Kosar’s honesty about his Dad during this section. Other players turn to random “financial advisors” who turn out to be crooks. For example, Michael Vick’s advisor ran a Ponzi scheme. Further reading: find a fee-only financial advisor.

Mouths to Feed – For many of these athletes, their pay check isn’t just a way for them to escape poverty. It’s a way for them, their family, and their community to escape poverty. Bernie Kozar said at one point he found one of his cell phone bills and it had more than 60 lines on it! He was funding 60 cell phone lines for family and friends. Several players talked about how when they were playing they were making everyone’s mortgage payments and that family and friends knew when their pay day was better than them.

Baby Mama Drama – The saddest section of the film, was this one about all the fake and broken relationships that athletes deal with which result in out of wedlock kids and divorces. Many player lamented about their wives leaving them once they left the league or about how much in child support they still had to pay even though they weren’t making big money anymore. This segment also references a website, BallerAlert.com that notifies gold-digging women about the whereabouts of rich players (so that they can go to where they are and try to meet them). Further reading: can you afford a baby?

Banged Up – Many players think they are going to play forever and never deal with a costly injury. But injury can be a double whammy on a player’s wealth: shorten their career and lead to more medical bills, prescription drugs, and potential drug problems. The NFL players are particularly vulnerable to medical loss of wealth because they have the lowest salaries, the shortest careers, and are more likely to be injured at some point.

Game Over – The last segment dealt with the fact that many players just aren’t prepared for life after sports. They don’t have a backup plan, and when they are forced to retire they don’t have another source of income to turn to to help them deal with their new lifestyle.

Final Thoughts on Broke

The film summed things up by first discussing the typical pro athlete investment portfolio. A model portfolio, and I would agree, would contain primarily securities (stocks, bonds, and cash), followed by a little bit of real estate, private equity, and alternative investments. These athletes tend to skew the portfolio towards private equity and real estate such that they portfolio looks like this:

Typical Pro Athlete Portfolio - Broke 30 for 30
Typical Pro Athlete Portfolio

Further reading: learn about asset allocation.

The leagues have tried to help the players deal with their money by implementing financial advisor requirements and rookie transition programs. But these had many critics in the film.

One biting criticism, I thought, was aimed at the universities where these players come from. Our colleges and universities make millions from the efforts of these players over their careers, without ever paying the players, and more to the point of this film, without ever teaching them how to deal with money once they get it. I’m no pro athlete, but I can relate to this criticism, and I suspect many of you can too.

If you’ve seen Broke, what’s your impression of the film? Did the film change your opinion on what you think of pro athletes who blow all their money?

If you’d like to see Broke, visit the ESPN 30 for 30 site and check the next air time. There might also be a copy floating around on the Internet you can check out.

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  1. Avatar Roger Wohlner says:

    @FAmilyGuy  to your point #1, this fee-only advisor says you have no idea what you are talking about.  Fee-only advisors don’t sell annuities or any other financial product.  About 1/2 of my clients are flat fee, I can look you or much importantly them in the eye and tell them my advice is based upon what I view to be in their best interests, PERIOD.  Why don’t you man up, use your real name, or better yet call my office at 847-506-9827, or perhaps you are afraid that you might learn something (like the truth)?  Also 2 and 20 might biggest scam of them all.

    1. Avatar FAmilyGuy says:

      @Roger Wohlner  @FAmilyGuy No go on the personal attacks.  Man up?  Wow, I dont know you and I already feel for your clients.  Ease up on the testosterone.  Nice try on the self advertising though.  Also, nut job trolls like you is why internet anonymity is important.  2/20 in my opinion, is a great profit incentive.  Quick, name one flat fee advisor with greater than 20% returns….. So lemme get this straight, you think its a good idea to charge a flat fee, while making your customer’s returns?  Sounds self defeating to me.  If you choose to sell your advice, gain returns for your client and chose to under-reward your labor, Im sure you would be popular in Mexico.  Perhaps a newsletter would be a more stress free, income producing venture for you.  Also, If I was you, I would delete your real name  and number off of this, judging I doubt you want your clients to know you argue with random, 30 year old strangers on the web.  Not a good look “bro”.

      1. Avatar Roger Wohlner says:

        I am always amazed at comments from folks like yourself who hide behind names like “FAmilyGuy.”  If you want any credibility, use your real name and tell us why your opinion holds any water.  The phone number wasn’t about advertising it was to afford you the opportunity to speak with someone who understands the proper way to deliver financial advice just in case you had an interest in learning something which I gather is clearly not the case.

    2. Avatar FAmilyGuy says:

      @Roger Wohlner  @FAmilyGuy I also forgot, theres this little thing called technology.  Soon all you 1% FA’s with your CFP’s and Non Transparent returns will be outdated by the Covestors of the world.  Nice website though.  🙂

  2. Avatar FAmilyGuy says:

    Hey Phillip! Great article.  2 things.  1. Fee only advisors are the worst kind of crooks, why? They have no profit incentive to get returns for their clients, in aggregate, a 2/20 with watermarks is the best structure in my opinion.  A fee only advisor will put you in a variety of boring, non performing mutual funds while still collecting their 1% fee.   The name of the game becomes “How much AUM do I need in order to achieve a nice 2 Million dollar fee @ 1% of AUM”  Customer service goes out the window in a race to accumulate funds.  Worthless Annuities get sold, Mutual Fund placements and other garbage I see FA’s hustle people for, EVERYDAY.  
    2. The financial advice these jerks gave these young men was horrible.  How the hell can you suggest to put an athlete in 70% equities in this manipulated, BS market?  If I ever snagged an athlete client I would put him in Triple Tax Free Muni Bonds, No Real estate, and only the best Vanguard funds, small allocation to Hedge Funds, Alt Investments and Futures, small like 10% of assets.  The FA’s on that show looked like shysters, licking their teeth at a chance to sell stock, pocket half the commission, and I imagine spreads on fictitious trades.  Its not like it doesnt happen.  
    3.  Ok, So I lied, 3 Things.  If you are going to marry a woman who only knew you once you were a BMOCampus:  YOU ARE BETTER OFF WITH AN ESCORT SERVICE!  60% Divorce rates smells like lots of Gold Diggers who wont stick it out with a dude once his funds are low.  Some of these guys are ridiculous.  Marrying bimbo’s who wouldnt even spit on them had they worked at a Foot Locker.  Then, these morons have BABIES with these b*tch%s.  UNBELIEVABLE.    They should teach these guys how to masturbate for crying out loud.  
    4.  Dear Athletes:  Screen people yourself!  Try cold calling an athlete and or his agency, see how fast they swat you down!  Why?  They have the idiot/athlete  in their pockets, and would like NO outside advice.  They refer said idiot to other Shysters.  Alas, these guys wonder why they are broke by the time the checks clear, and their careers are over.  I would get into the psychological aspects of young black men trusting older white men with their money, but thats a different topic altogether.  Besides, black on black financial crime is on an upswing!

  3. Sad. But I’d still rather be their kind of broke than my kind of broke. Meaning that if you’re going to to go broke, you might as well live it up and have fun. Well, maybe not. But it sounds good.

    1. Avatar Philip Taylor says:

      I think like you, everyone of us would like a shot at this instant millionaire thing. What would you do with it?

  4. I thought I was going to love this program but I actually ended up annoyed by it.  I wanted to follow each of their stories not the broad topics.  I thought it contained awesome information but not enough depth.  For example, I would have preferred to follow Risen’s story from the beginning to the end, kosar’s story, etc.  Not just sound bites

    1. Avatar Philip Taylor says:

      @MJTM I agree. I wanted more in-depth as well. The endless back and forth was dizzying, and I was pausing to take notes.

  5. Thanks for the review Phil.  I haven’t had a chance to watch this but will make a point to do so.  The whole issue of athletes going broke really riles me up as a fee-only financial advisor.  At one point I thought about joining the NFL’s advisor program.  It turns out this program is a total joke, they let in all sorts of “advisors” who in many cases have put the players in some pretty questionable investments.    To their credit I believe that either the NBA or the NFL sponsors financial education for their rookies,  I think another part of the problem is that the players rely on their agents for referrals and well that doesn’t always go so well.  
    Every so often I get the bug to go after some athlete clients, but I doubt that I ever will.  One time I discussed with my wife.  My thought is I might land a few players from America’s team (the Packers not Cowboys), get some sideline passes to Lambeau, etc.  She indicated that I was more likely to end up with some _____ like Tank Johnson who had just been arrested after his home here locally was raided for guns.

    1. @rwohlner There was a scene where Herm Edwards was talking about personal finances with the rookies at the rookie camp.  Not high level stuff just basic stuff about you only need 1 of everything.  You don’t need 3 cars, don’t need 5 houses, don’t need 7 girlfriends, etc.

  6. Avatar Veronica @ Pelican on Money says:

    To top it all off they get Traumatic Brain Injuries from concussions that nobody has told them about while they were playing. TBI causes all sorts of problems, seizures, inability to think, move, get up… its the worst. Imagine being broke, not being able to get up on your own and having a family to support. That’s the worst.

    1. Avatar Philip Taylor says:

      @Veronica @ Pelican on Money Totally agree. Most athletes know they are taking a risk, but maybe not to the full extent. As a footballer myself I remember taking head hits and just thinking it was part of the deal. There’s no way I would want my son taking those same hits.

      1. Avatar Veronica @ Pelican on Money says:

        @Philip Taylor  @Veronica @ Pelican on Money Many are now suing their teams because they weren’t informed on the harm of head impacts causing TBI. It was a big deal in the news not long ago.

  7. I heard about this documentary, I think it was on Bloomberg.  I made it a point to set my DVR to record it while I was at work.  It was a great film, and I really enjoyed it.  There were a few athletes that I expected to see, but didn’t.  I liked that he did include a few athletes who have gone on to be successful in their post-pro careers because of sound financial practices.One athlete who I have a lot of respect for in a financial aspect is rookie Alfred Morris of the Washington Redskins.  Even with his $390,000$ salary for 2012, he is still driving his 1991 Mazda to and from practice and games!

    1. Avatar Philip Taylor says:

      Now that’s impressive! I don’t know too many people driving 1991 vehicles, much less NFL players. Good for him.

  8. Avatar krantcents says:

    The reasons do not surprise me, since most athletes are unprepared for the wealth thrust upon them.  Education, if taken seriously should prepare you to think and make good judgments.  Most athletes go through college thinking someone will punch their ticket and school does not matter.  This is the major reason such a high persentage are broke later.

    1. Avatar Philip Taylor says:

      I think you have a solid point that many athletes on their level don’t care as much about school. But I argue that school doesn’t prepare even the most studious for handling personal finances, much less an instant million dollars.

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